Dear Legal Mailbag,
With the rising cost of healthcare, lack of state funding for excess cost grants, flat ECS spending, and the never-ending costs of unfunded mandates, it should come as no surprise that school budgets are being stretched paper thin.
With this in mind, I called a meeting with my PTO to discuss some creative strategies to raise money for the school. After a few hours of brainstorming, my parent group had the idea to raffle off no-cost items like preferred parking at the annual “moving up” ceremony, front row seats at the band/chorus concert and of course my personal favorite, Principal of the Day for one lucky student. Don’t worry, I’ll be sure not to violate FERPA that day. Parents also offered unique opportunities like “Ride to School in a Fire Engine.”
The PTO held the auctions the night of “Open House” and even provided an online bidding for parents unable to attend. We raised thousands of dollars to support programs in the school cut by the annual budget shortfall.
A few weeks after the auction and the winners were announced and broadcast over social media, I was reported to the town ethics commission. A parent claimed that the PTO auctions were held in violation of state law and that as the building Principal, I had no authority to “give away” or auction off items considered to be town property. Turns out the parent was outbid for Principal of the day. Thank God, because his kid is a brat.
Did we really violate state law?
Broke but Resourceful.
Dear Broke:
Legal Mailbag is not one to complain, but your very interesting question actually required that this otherwise all-knowing contributor to the Newsblast do some legal research.
At the outset, Legal Mailbag notes that you have mixed up your terms, referring to “raffles” and “auctions” interchangeably when they are different things. Given the reference to the parent’s being “outbid,” Legal Mailbag understands that your PTO conducted an “auction.” However, there is also potential interest (either for your PTO or another) in conducting a “raffle,” and Legal Mailbag will address the rules for conducting “raffles” as well.
It appears from your question that your PTO conducted an “auction” because there was bidding for the various prizes. Non-profit organizations can conduct auctions to raise money as they see fit with very little regulation. The Department of Consumer Protection has provided guidance to charitable organizations on fundraising, and that guidance includes the explanation that “Connecticut does not have specific regulations regarding auctions. However, organizations may wish to contact their town for information regarding local requirements or restrictions.” See State of Connecticut, Department of Consumer Protection, Starting a Charitable Organization in Connecticut.
By contrast, there are various rules governing “raffles.” Only organizations qualified under Conn. Gen. Stat. § 7-172 (which includes your PTO) can conduct “raffles,” and “raffles” are allowed under Connecticut law only if the sponsoring organization obtains a permit in a municipality that permits “raffles.” Indeed, obtaining a permit from the local chief of police or, if there is no local chief of police, the chief executive officer of the municipality, is only one of many legal requirements for conducting “raffles” under Connecticut law. The Connecticut Department of Consumer Protection is responsible for administering the laws concerning “raffles” (and other games of chance), and it has published guidance online for compliance with these laws, found here: Bingo, Bazaar and Raffle Information for Organizations and Municipal Officials in Connecticut.
As a careful reader, you will have noted that Legal Mailbag has put “raffle” in quotation marks. In these laws regulating games of chance, the word “raffle” is a defined term, as follows:
(5) “Raffle” means an arrangement for raising money by the sale of tickets, certain among which, as determined by chance after the sale, entitle the holders to prizes.
Conn. Gen. Stat. § 7-170(5). So far, this definition would cause the “raffle” statutes to apply to the situation you described. However, the word “prizes” is also defined in these statutes, and Conn. Gen. Stat. § 7-177 provides in relevant part:
(a) All prizes given at any bazaar or raffle shall be merchandise, tangible personal property or a ticket, coupon, gift card or gift certificate, entitling the winner to merchandise, tangible personal property, services, transportation on a common carrier by land, water or air and to any tour facilities provided in connection therewith, or to participation in a lottery conducted under chapter 226.
In reviewing what winners received in what your PTO called a “raffle,” Legal Mailbag concludes that these special benefits (preferred parking at the annual “moving up” ceremony, front row seats at the band/chorus concert, and Principal of the Day) are not “prizes” as that word is used on the “raffle” statutes. Accordingly, Legal Mailbag advises that your PTO would not need a raffle permit based on the facts presented because this fund-raising event would not be a “raffle” in that winners did not receive “prizes.” As a precaution, however, Legal Mailbag further advises that the PTO confirm with the police chief and/or the Department of Consumer Protection before conducting such a fundraising activity to confirm that they agree with Legal Mailbag’s analysis.
Legal Mailbag notes that this party-pooper parent also claims that you did not have the right to give away town property. The parent is right in stating that school officials do not have the right to give away town property (because the town owns property used for school purposes). However, the parent is incorrect in claiming that you did so. School officials “have the care, maintenance and operation of buildings, lands, apparatus and other property used for school purposes” under Conn. Gen. Stat. § 10-220(a). For a good cause, you are free to provide preferential parking or seating at concert without town permission, and designation as Principal for a Day does not involve town property at all
In sum, Legal Mailbag congratulates you and your PTO for your entrepreneurial spirit in these challenging times and hopes that this information will help you convince the parent that you and the PTO are innocent of any wrongdoing.